Earning Release

CNOOC Limited (NYSE:CEO) reported a significant increase in its top-line in 3Q 08, primarily driven by higher crude oil prices and increased production. We remain optimistic about the company’s development projects which will drive production volumes and revenues, supporting our fundamental outlook, going forward. We believe that the common stock is undervalued at current levels and hence we reiterate our BUY rating for the CNOOC common stock until we can fully reassess the company in our next update report. The Hong Kong dollar is currently pegged to the US dollar, therefore we do not anticipate a significant currency impact on the ADR.

Banco Bradesco S.A. (NYSE:BBD) reported healthy growth in revenues from financial intermediation in 3Q 08, driven by strong growth in the loan portfolio and higher returns from securities operations. However, the bank’s operating and bottom-line results fell short of our expectations, due to higherthan- expected expenses from financial intermediation. Consequently, we expect to lower our estimates and target price when we revalue the bank in our next update report. Nevertheless, we continue to see upside potential and therefore maintain our BUY rating for the preferred stock. We now expect to maintain our 6-12 month investment horizon, as we expect a significant negative currency impact on the ADR over the medium term. Therefore, we maintain our HOLD rating.

Gold Fields Limited’s (NYSE:GFI) top-line and profitability fell short of our estimates in 1Q 09. Considering this, as well as the fall in gold prices since our last update report and ongoing rises in input costs, we expect to lower our estimates and target price in our next update report. However, given the recent decline in the common stock price, we maintain our BUY rating. We now anticipate a significant negative currency impact on the ADR over our investment horizon1. However, based on our fundamental outlook, we maintain our BUY rating.

Nomura Holdings Inc.’s (NYSE:NMR) 2Q 09 top- and bottom-line results were well below our estimates, reflecting trading losses in credit, derivatives and equities trading. Considering the company’s disappointing quarterly results, as well as the impact of the ongoing volatility and weakness in global financial markets on banking stocks, we expect to lower our estimates and target price when we revalue the company in our next full update report. However, at current levels, we do not anticipate a change in our HOLD rating. We expect to revert to a 6-12 month investment horizon to value the company in our next full update report, as we now anticipate a significant positive currency impact on the ADR over the medium term1. Therefore, we maintain our BUY rating.

Panasonic Corporation’s (NYSE:PC) revenues were marginally below our estimate while net profit outperformed our expectations. We may marginally revise downwards our revenue and margin estimates in light of the global economic slowdown. However, we believe the recent decline in the common stock price provides an attractive investment opportunity at current levels. Consequently, we reiterate the common stock a BUY. We are likely to revert to a 6-12 month investment horizon as we now anticipate a significant positive currency impact on the ADR in the medium term1, hence, we maintain our BUY rating for the ADR.

Ricoh Company Ltd.’s (OTC:RICOY) 2Q 09 sales declined y-o-y, attributable to lower sales from the Industrial Products segment and Imaging Solutions segment, while margins experienced significant decline due to lower sales growth, coupled with increase in cost of sales and operating expenses, as a percentage of sales. Considering the company’s weak performance in 2Q 09, coupled with Management’s downward revision of its guidance for FY 2009, we are likely to revise downwards our sales and profitability estimates in our next full update report. Nevertheless, we believe the recent decline in the common stock price provides an attractive investment opportunity at current levels and, therefore, we maintain our current BUY rating for the common stock. We are likely to revert to a 6-12 month investment horizon as we now anticipate a significant positive currency impact on the ADR in the medium term2. Hence, we maintain our BUY rating for the ADR over the medium term.

BP PLC (NYSE:BP) reported impressive y-o-y growth in its 3Q 08 operating revenues primarily driven by a strong performance across its business segments. Strong revenue growth along with lower costs improved the company’s earnings and margins for the quarter. We believe the recent drop in share price reflects the global turmoil in the equity market and it has left the stock undervalued at current levels. Therefore, we do not anticipate a change in our BUY rating for BP’s ADR. We anticipate a positive currency impact1 on the UK common stock over the medium term and as the target price supports a BUY at current price levels, we reiterate the UK stock a BUY.

Akzo Nobel N.V (OTC:AKZOY) announced its 3Q 08 results on 29 October 2008. Although revenues were broadly in line with consensus estimates, earnings fell significantly below estimates. Given weak economic conditions in American and European markets, we anticipate a decline in demand for paints and coatings and are likely to lower our estimates and target price in our next update report. Nevertheless, given the recent decline in stock price, we see potential upside at current price levels, and therefore reiterate the common stock a BUY. Although we continue to anticipate a negative currency impact on the ADR over our investment horizon, given the recent decline in the ADR price, we see significant upside potential at current price levels and reiterate the ADR a BUY.

Lan Airlines S.A.’s (NYSE:LFL) 3Q 08 net revenues and profitability were significantly higher than our estimates given higher than expected capacity and lower than expected costs at the operating level. As current levels continue to support a BUY rating, we do not anticipate a change in our ADR rating. As we expect a significant positive currency impact over the medium term and given our fundamental outlook, we do not anticipate a change in our current Chilean Stock rating.

Canon Inc.’s (NYSE:CAJ) 3Q 08 results were below our expectations. Management has revised its top-line guidance marginally downwards for FY 2008, which is below our FY 2008 estimate. Considering the lower than expected revenue and profitability in 2Q 09, coupled with downward revision of Management’s guidance for FY 2009, we are likely to revise downwards our sales and margin estimates. Therefore, although current price levels no longer supports our HOLD rating, we reiterate our HOLD rating for the common stock. We continue to anticipate a significant positive currency impact on the ADR over the medium term1. Hence, we maintain our BUY rating for the ADR over our investment horizon.

Southern Copper Corporation’s (NYSE:PCU) 3Q 08 revenues were above our estimates, while adjusted1 net income was in line with our forecast as a result of higher-than-expected operating costs and a higher-than-anticipated tax rate. Considering the recent decline in spot metal prices (especially copper), we expect to lower our estimates and target price in our next update report. However, at current levels we continue to see upside potential and therefore maintain our BUY rating. The Peruvian stock trades in US dollars. Therefore, we do not anticipate any currency impact over our investment horizon. Based on our fundamental outlook, we maintain our BUY rating.

UPM-Kymmene OYJ (OTC:UPMKY) reported disappointing top-line results for 3Q 08, reflecting slower demand from Europe. Meanwhile, in reaction to the company’s restructuring initiatives, the common stock price has appreciated strongly since our last update report, dated 17 October 2008, despite higher cost pressures and falling demand. Nevertheless, given our concerns over the demand and pricing outlook, we do not anticipate a change in our SELL rating. We expect to revert to a 6-12 month investment horizon to value the company in our next update report, as we now anticipate a significant negative currency impact on the ADR over the medium term. Therefore, we maintain our SELL rating.

United Microelectronics Corporation’s (NYSE:UMC) net sales and operating margin were in line with our expectations for 3Q 08. However, adjusted net margin1 was below our forecast. Additionally, Management outlook for 4Q 08 falls short of our previous expectations. In view of further deterioration in UMC’s business outlook since our previous update report, we will revise our estimates and target price downward in our next full update report and maintain our HOLD rating for the UMC common stock until we revalue the company in our next update report. We maintain our current ADR rating based on our fundamental outlook and anticipation of a negative currency impact on the ADR in the medium term.

QLT Inc. (NASDAQ:QLTI) reported a significant y-o-y decline in revenues, lower than our expectations for 3Q 08. Although QLT reported better than anticipated operating performance in 3Q 08, we remain concerned for QLT’s weak product pipeline, with no strong product expected over the next 2 years and weakening sales of Visudyne. However, at current price levels we reiterate the NASDAQ common stock a BUY.We are likely to revert to a 6-12 month investment horizon as we now anticipate a significant positive currency impact on the Canadian stock over the medium term1. We maintain our BUY rating for the Canadian stock based on our expectation of a positive currency impact on the Canadian stock over the medium term.

Although China Life Insurance Company Ltd. (NYSE:LFC) reported significant y-o-y growth in total revenues (referred to by the company as operating income) in 3Q 08, net income attributable to common shareholders fell significantly y-o-y, reflecting a decline in net investment income, losses on investments and higher expenses. In light of the current credit market conditions we are likely to reduce our estimates when we come to revalue the stock in our next update report but 3Q 08 performance was relatively positive. We believe that the company is fundamentally well positioned to weather the financial crisis, with a forecast of 50% y-o-y premium income growth issued on 12 October 2008 and a dominant market share. Therefore, we maintain our BUY rating for the common stock at current price levels. Based on our fundamental outlook for the company, we maintain our current BUY rating for the ADR. The Hong Kong dollar is currently pegged against the US dollar.

Axis Capital Holdings Ltd.’s (NYSE:AXS) 3Q 08 adjusted1 total revenues were in line with our and market estimates. However, adjusted net loss was higher than our and market expectations. As premiums exceeded our expectations in 3Q 08, we are likely to revise our estimates upwards, although we will revise our investment income expectations downwards to reflect the impact of weakening financial markets. However, our outlook for the company remains broadly positive and we maintain our BUY rating for the NYSE common stock at current price levels. Given our positive fundamental outlook for the company, and as we now anticipate a significant positive currency impact on the European stock over our investment horizon3 we upgrade our European stock rating from a HOLD to a BUY.

ARM Holdings PLC’s (NASDAQ:ARMH) 3Q 08 total revenues, adjusted operating margin and adjusted net margin1 outperformed our estimates. The ARM common stock experienced a 21.1% surge in yesterday’s trading after 2Q 08 revenues exceeded market expectations and Management guidance for FY 2008 was reiterated. Although results were stronger than expected in 3Q 08, in view of the current financial market turmoil and uncertainty in the semiconductor industry, we do not expect a significant upside in the common stock from the current levels over our investment horizon. Subsequently, we maintain our HOLD rating for the ARM common stock. Although the current target price supports a BUY rating, as we now anticipate a significant negative currency impact on the ADR over the medium term2 we downgrade the ADR from a HOLD to a SELL.

ACE Group’s (NYSE:ACE) 3Q 08 adjusted1 total revenues were in line with our estimate. However, adjusted net income fell marginally short of our estimate reflecting higher-than-expected losses. The company witnessed a strong performance in its Life Insurance and Reinsurance and Insurance Overseas segments due to the acquisition of Combined Insurance Company of America and its subsidiaries (Combined Insurance). Although we will revise our net income estimates marginally downwards in our next update report, our positive outlook for the company remains intact. Therefore, we maintain our BUY rating for the NYSE common stock at current price levels. Given our positive fundamental outlook for the company, and as we now anticipate a significant positive currency impact on the European stock over our investment horizon3 we maintain our BUY rating for the European stock.

Empresas ICA, S.A.B. de C.V (NYSE:ICA) reported strong 3Q 08 results. Margins were significantly above our expectation for the quarter. Management’s guidance for FY 2008 reflects a strong backlog and growth in profitability. However, revenues from the Housing Development segment are expected to decline in view of a poor outlook for real-estate markets across the world. However, we believe the company’s overall growth prospects remain strong and in view of its healthy construction backlog, we maintain our current BUY rating for Empresas ICA’s common stock, until we completely reassess the company in our next update report. In view of our fundamental outlook, we continue to maintain our current BUY rating for the ADR, even though we anticipate significant negative currency impact on the ADR over the investment horizon.

Honda Motor Co., Ltd.’s (NYSE:HMC) 2Q 09 revenues and net performance were in line with our expectations. Considering the recent volatility and weakness in global financial markets, Management has revised downwards its estimates for FY 2009. Considering Management’s expectations are below our FY 2009 expectations, coupled with our concern over Honda’s high exposure to the North American market and weak domestic outlook; we are likely to revise our estimates downwards. Consequently we reiterate our HOLD rating for the common stock. We are likely to revert to a 6-12 month investment horizon as we now anticipate a significant positive currency impact on the ADR over the medium term1. Hence, despite our weak fundamental outlook, we reiterate our BUY rating for the ADR over the medium term.

3Q 08 revenues and earnings for America Movil S.A. de C.V (NYSE:AMX) were below our expectations. However, during the quarter AM continued to make healthy additions to its wireless subscriber-base, with growth from Brazil, Columbia and Mexico. However, the common stock has declined 27.2% since our previous update report dated 19 August 2008 in line with the 30.4% decline in Mexbol Index over the same period. Considering its strong presence in the Latin American wireless markets, we continue to expect healthy growth from the company and hence reiterate our BUY rating for the AM common stock. Although we may revise our estimates in our next update report, we do not anticipate a change in our current rating for the ADR based on current price levels. We expect to change to a 6-12 month horizon to value the company in out next update report as we now anticipate a significant negative currency impact on the ADR in the short to medium term.

Check Point Software Technologies Ltd. (NASDAQ:CHKP) reported modest growth in revenues. Top-line growth was within Management’s guided range and in line with our expectations. Considering the company’s constant efforts to upgrade and innovate and its expansion strategy in terms of geography and product lines, we do not anticipate a change in our current rating for the Check Point common stock at current levels. The common stock price has declined significantly since our 2Q 08 update dated 08 September 2008, led by increased weakness in global bourses on account of the financial crisis in the US and its adverse negative impact worldwide. Considering the uncertain economic and business conditions, we are likely to reassess our future projections. As we continue to anticipate a positive currency impact on the European stock, we do not anticipate any change in our current rating on the European stock. We are likely to change to a 6-12 month horizon to value the company in our next update report as we now anticipate a significant positive currency impact on the European stock over the next 6-12 months horizon.

In 9M 08 PT Indosat Tbk’s (NYSE:IIT) revenues and EBITDA, were in line our estimates while operating income and adjusted1 net income were above our estimates. Although the company reported significant y-o-y growth in revenues and EBITDA, since it was in line with our expectations we do not anticipate any significant revision in our estimates or target price. As we now expect a significant negative currency impact on the ADR in the medium term, we are revising our rating for the ADR from a BUY to a HOLD.

Rogers Communications Inc (NYSE:RCI) revenues were in line with our estimate, margins were above our expectations, primarily due to lower than anticipated total operating expenses, as a percentage of revenues in 3Q 08. Going forward we expect robust growth in the Wireless segment to drive total revenues. In addition, as the common stock is currently trading significantly below its fair value, we maintain our current rating for the common stock. Although we expect a negative currency impact in the medium term, we do not anticipate a change in our current rating given our fundamental outlook and current target price. We are likely to revise our investment horizon from 6-24 months to 6-12 months as we now expect a significant currency impact over the medium term.

Royal Caribbean Cruises Ltd.’s (NYSE:RCL) 3Q 08 total revenues were in line with our expectations, while operating and net performance exceeded our expectations. Going forward, although it is likely that we will revise our estimates to reflect Management guidance, given the recent decline in the stock price, we maintain our current BUY rating for the NYSE common stock. We reiterate the Norwegian stock a BUY based on our fundamental rating and an expected positive currency impact over the medium to long term. We are likely to revert to a 6-24 month horizon as we now expect a significant currency impact in the long term.

SK Telecom Co. Ltd’s (NYSE:SKM) 3Q 08 revenues were in line with our estimates while operating income, EBITDA and adjusted1 income were below our estimates, primarily due to higher than expected operating expenses as a percentage of revenues. In light of the weak 3Q 08 results we are likely to revise our estimates and target price downwards. However at current levels, we do not anticipate a change in our rating. Although the target price supports a BUY rating at current levels, as we now expect a significant negative currency impact on the ADR over the medium term2 we downgrade the ADR from a BUY to a HOLD.
Sohu.com Inc. (NASDAQ:SOHU) reported strong 3Q 08 results with robust revenue growth in Advertising and Online game segments. The NASDAQ common stock appreciated 22% yesterday in a single trading session, partially due to 3Q 08 results surpassing Management guidance and street estimates. Earnings were positively impacted by lower operating expenses coupled with lower tax related expenses. We believe, although the Chinese advertising industry is witnessing weakness on account of the global as well as domestic economic slowdown, in view of Sohu’s strong position, the Advertising and Online segment will continue to drive revenue growth, going forward. Hence, at current levels we do not anticipate a change in our BUY rating for the NASDAQ common stock. We are reverting to a 6-12 month2 horizon to value the company as we now anticipate a significant positive currency impact on the European stock in the short to medium term. Hence, at current levels we do not anticipate a change in our current BUY rating.

Suncor Energy Inc (NYSE:SU) reported strong 3Q 08 results, in line with our expectations. However margins were below our expectations due to higher energy marketing and trading costs during the quarter. Although the company revised its production guidance for FY 2008 and capex guidance for FY 2009 downwards which will delay its Voyager project by 1 year, we believe the stock is fundamentally undervalued at current price levels. Therefore, we maintain our BUY rating for the company until we reassess the stock in our next update report. Although we continue to expect a negative currency impact on the NYSE stock over our investment horizon, given current price levels we maintain our BUY rating for the NYSE stock.

Tata Communications Limited’s (NYSE:TCL) 2Q 09 standalone net sales, EBITDA, operating profit and adjusted1 net income were significantly above our expectations. Margins were above our estimates due to lower than expected network costs. In light of strong 2Q 09 results we are likely to revise our estimates and target price marginally upwards. In our 1Q 09 update report, the fundamental valuation of TCL resulted in a target price of INR365.26 representing a 15% downside. Since then the common stock has depreciated significantly and achieved our target price on 24 October 2008, closing at INR365.25. The BSE Sensex has declined 34.4% since our 1Q 09 update report closing at 8,701.07 on 24 October 2008. We upgrade the common stock from a SELL to a HOLD as we believe that the stock is trading close to its fair value. We reiterate our SELL rating on the ADR as we now anticipate a significant negative currency impact on the ADR over the next 6-12 months.

Telecomunicações de São Paulo S.A.’s (NYSE:TSP) 3Q 08 performance was largely above our and market expectations. Going forward, we remain positive regarding Telesp’s performance, considering its leading position in the fixed-line market in Sao Paulo in Brazil, coupled with the growth potential in Data Transmission services. Telesp continues to witness robust growth in its Pay TV subscriber-base, which we expect to continue. However, considering current levels we reiterate Telesp’s preferred common stock a HOLD until we reassess our estimate and ratings in our next update report. We expect to change to a 6-12 month horizon to value the company in out next update report as we now anticipate a significant negative currency impact on the ADR in the short to medium term1. We may revise our estimates in our next update report and therefore anticipate a change in our current rating for the ADR based on current currency forecast.

Embotelladora Andina S.A (NYSE:AKOb) reported healthy revenue growth in 3Q 08, reflecting a rise in sales volumes and favourable price adjustments. However, operating margin declined as cost of sales and Selling, General & Administrative (SG&A) expenses, as a percentage of revenues, increased. Going forward, we continue to expect robust volume growth from all operations, supporting overall revenue growth. Therefore, based on 3Q 08 performance, we maintain our BUY rating for the common stock. Although we now expect a negative currency impact on the ADR, given our fundamental outlook and the current ADR target price, we maintain our BUY rating.

Embotelladora Andina S.A (NYSE:AKOa) reported healthy revenue growth in 3Q 08, reflecting a rise in sales volumes and favourable price adjustments. However, operating margin declined as cost of sales and Selling, General & Administrative (SG&A) expenses, as a percentage of revenues, increased. Going forward, we continue to expect robust volume growth from all operations, supporting overall revenue growth. Therefore, based on 3Q 08 performance, we maintain our BUY rating for the common stock. Although we now expect a negative currency impact on the ADR, given our fundamental outlook and the current ADR target price, we maintain our BUY rating.

Bayer AG (OTC:BAYRY) recorded a y-o-y increase in net sales in 3Q 08. However, EBITDA, operating and net income declined in 3Q 08. Nevertheless, we remain optimistic for the performance of the company’s key product; Yasmin/YAZ/Yasminelle, as well as the company’s CropScience subgroup. Consequently, our outlook for the company remains positive and we do not anticipate a change in our current BUY rating for the common stock. We are likely to revert to a 6-12 month investment horizon as we now anticipate a significant negative currency impact on the ADR in the medium term. However, we maintain our BUY rating for the ADR based on our fundamental outlook.

Banco Bilbao Vizcaya Argentaria S.A. (NYSE:BBV) reported healthy 3Q 08 results on 29 October 2008, with strong y-o-y growth in Net Interest Income (NII). However, the Non-performing Loan (NPL) ratio rose by 65 bps y-o-y to 1.54%, reflecting deterioration in asset quality. Going forward, although we are optimistic that Management’s efforts to rein in costs will lend some support to the bottom-line, we expect a slowdown in the Spanish and Portuguese markets to be compounded by weak conditions in Mexico and South America. Therefore, our outlook remains cautious and we maintain our HOLD rating, even though our current target price implies a BUY. We expect to revert to a 6-12 month investment horizon to value the company in our next full update report, as we now anticipate a significant negative currency impact on the ADR over the medium term. However, based on our fundamental outlook, we maintain our HOLD rating.

Canadian Pacific Railway Ltd.’s (NYSE:CP) 3Q 08 revenues were broadly line with our estimate, while profitability was above our expectations given lower than expected material and income tax expenses. As a result of this and current price levels, we do not anticipate a change in our BUY common stock rating. Although we continue to anticipate a negative currency impact on the NYSE stock over 6-24 months, given our positive fundamental outlook and current price levels, we do not anticipate a change in our BUY rating. We expect to revert to a 6-12 month horizon in our next update report as we now anticipate a significant currency impact on the NYSE stock in the medium term.

Chicago Bridge & Iron Co. N.V. (NYSE:CBI) reported healthy growth in its top-line for 3Q 08, with growth across most of its segments. However, profitability was impacted by approximately US$86 mn additional costs associated with the completion of two UK projects during the quarter. Management has issued a cautious outlook for FY 2008 as an anticipated decline in capital expenditure plans by Oil Exploration & Production companies will impact revenue growth. As a result, we are likely to reduce our estimates and target price in our next update report. However, we believe that the significant decline in the NYSE common stock price, due to the ongoing global financial markets crisis, has left the company undervalued and, therefore, we maintain our BUY rating. Given our fundamental outlook and as we now expect a positive currency impact on the European stock over our investment horizon, we maintain our BUY rating.

Dassault Systemes S.A.’s (NASDAQ:DASTY) 3Q 08 top-line and net income were above our, market and Management’s expectations. However, the slowdown in the global economy has created an uncertain and challenging business environment and, therefore, we maintain our HOLD rating for the common stock at current levels, even though the target price supports a BUY. As we continue to anticipate a significant negative currency impact on the ADR over the next 6-12 months1 and given our fundamental outlook, we maintain our Dassault ADR rating a SELL, even though the target price supports a BUY.

While Fomento Economico Mexicano, S.A.B de C.V’s (NYSE:FMX) 3Q 08 revenues and operating profit were in line with our expectations, adjusted1 net profit was significantly above our expectations. Going forward, we expect FEMSA to experience healthy revenue growth, reflecting strong performances from Coca-Cola Femsa and Femsa Camercio, and ongoing efforts to open new stores under the Oxxo division. In light of these factors, we maintain our BUY rating for the common stock at current levels. Although we expect a negative currency impact on the ADR, we maintain a BUY rating given our fundamental outlook and current target price.

Desarrolladora Homex S.A.B. de C.V.’s (NYSE:HXM) 3Q 08 total revenues were in line with our expectation. However, margins were below our forecasts for the quarter reflecting higher-than-anticipated total costs. Although the current economic climate should provide a cautionary outlook, particularly in the real estate industry, Management remains positive regarding growth potential. We continue to believe that the company’s long term growth will be supported by the government’s efforts to reduce the housing deficit in Mexico. Therefore, at current levels, we view the common stock as an attractive investment opportunity and maintain our BUY rating. We expect to introduce a 6-12 month investment horizon when we revalue the company in our next full update report. Although we now anticipate a significant negative currency impact on the ADR over the medium term1.given our fundamental outlook and the current target price, we maintain our BUY rating for the ADR.

Although Nexen Inc.’s (NYSE:NXY) 3Q 08 revenues were in line with our expectation, earnings were below our estimates given higher than expected transportation, exploration and tax expenses incurred during the quarter. Despite the lack of any company guidance for FY 2008, based on our fundamental outlook, we believe that at current price levels, Nexen’s common stock is undervalued. Therefore, we maintain our current BUY rating until we reassess the stock in our next update report. Although we continue to expect a negative currency impact on the NYSE stock over our investment horizon, given current price levels, we maintain our BUY rating for the NYSE stock.

RenaissanceRe Holdings Ltd.’s (NYSE:RNR) 3Q 08 adjusted1 total revenues were higher than our estimate in 3Q 08. However, adjusted net loss was also above our estimate in 3Q 08 reflecting higherthan- expected losses from hurricanes. Although the company’s total revenues were higher than our estimate, considering the decline in net investment income and significant increase in claim expenses, we are likely to revise our estimates marginally downwards when we come to revalue the stock in our next update report. However, we maintain our BUY rating for the NYSE common stock at current price levels. Given our positive fundamental outlook for the company, and as we now anticipate a significant positive currency impact on the European stock over our investment horizon3 we maintain our BUY rating for the European stock.

SAP AG (NYSE:SAP) reported y-o-y double-digit top-line growth in 3Q 08, driven by healthy growth in Software and software related service revenues. Net income was higher than our expectations, reflecting a nonoperating income and lower-than-estimated financial expenses. However, the slowdown in the global economy has created an uncertain and challenging business environment and, therefore, we reiterate our common stock rating a HOLD, even though the target price supports a BUY rating. As we continue to anticipate a significant negative currency impact on the ADR over the next 6-12 months1 and given our fundamental outlook, we maintain our SAP ADR rating a HOLD, even though the target price supports a BUY.

Sony Corporation’s (NYSE:SNE) 2Q 09 revenues were marginally below our expectations, while margins underperformed, primarily due to weaker than anticipated performances from the Games, Financial Services and Others segments during the quarter. Considering the company’s weak performance in 2Q 09 and Management’s downward revision of its guidance for FY 2009 sales and profitability, our outlook for the company remains broadly unchanged. However, we believe the common stock is currently undervalued due to the significant decline in the common stock price, associated with broader weakness and volatility in global financial markets. Consequently, we reiterate the common stock a BUY. We continue to anticipate a significant positive currency impact on the ADR over the medium term1. Hence, we maintain our BUY rating for the ADR over our investment horizon.

Siliconware Precision Industries Ltd.’s (NASDAQ:SPIL) 3Q 08 revenues were in line, while margins outperformed our expectations. Although 4Q 08 revenue and operating margin guidance falls below our earlier expectations, we expect SPIL to see revenue growth in the latter part of 2009. Hence, we maintain our current BUY rating for the common stock from current levels until we revalue the company. We now anticipate a significant negative currency impact on the ADR in the medium term. However we maintain our BUY rating based on the fundamental outlook and current price level.

STMicroelectronics N.V.’s (NYSE:STM) 3Q 08 top- and bottom-line surpassed our expectations. Moreover, Management’s guidance for 4Q 08 net revenue is in line with our estimate, and the company’s gross margin guidance exceeds our expectation for 4Q 08. Therefore, we do not anticipate a change in our rating and maintain our current BUY rating for the ADR. We maintain our current BUY rating for the European stock based on the company’s fundamental performance and our anticipation of positive currency impact on the European stock in the near term.

TNT N.V.’s (OTC:TNTTY) 3Q 08 revenues and profitability were below our expectations, reflecting the impact of the slowdown in the global economy. Although we are likely to revise our estimates downwards in our next update report, we believe the decline in the common stock price has left the company significantly undervalued at current levels and, therefore, maintain our BUY rating. We continue to anticipate a negative currency impact on the ADR over the 6-24 month investment horizon. However, given the significant decline in ADR price and our fundamental outlook, we maintain our BUY rating at current levels.

News

Yanzhou Coal Mining Company Ltd. (NYSE:YZC) reported a strong growth in its top-line for 3Q 08, supported by a significant rise in average realized coal prices, while the bottom-line benefited from a decline in operating costs (as a percentage of revenues) and a lower effective tax rate. Although we expect coal prices to remain at historically high levels, we expect to lower our estimates and target price in our next full update report, to reflect the recent downturn in spot prices and in commodities more broadly. Nevertheless, we believe that Yanzhou is cheap at current levels, and maintain our BUY rating for the common stock. The Hong Kong dollar is pegged to the US dollar. Therefore, we assume no currency impact on the ADR over our investment horizon. We maintain our BUY rating in line with our fundamental outlook.

Due to significant volatility in global markets, the Arcelor Mittal (NYSE:MT) ADR appreciated significantly on 28 October 2008. In view of the recent decline in steel price since our last report, we expect to lower our top- and bottom-line estimates when we revalue the company in our next full update report. However, at current levels, we continue to see upside potential and therefore maintain our BUY rating. We now anticipate a positive currency impact1 on the European stock over our investment horizon. As the target price upholds a BUY rating at current price levels, we maintain our BUY rating for the European stock.

Tenaris S.A.’s (NYSE:TS) ADR increased significantly on 28 October 2008 reflecting the persistent volatility in the global markets. However, in light of the steep decline in global oil and steel prices, compounded by the prevailing turmoil in the global financial markets, we are likely to lower our revenue and profitability estimates in our next update report. However, given current price levels, we believe the company is undervalued and we maintain our BUY rating for the ADR. We now anticipate a significant positive currency impact1 on the European stock over our investment horizon. Hence, we maintain our BUY rating for the European stock.

Thomson S.A.’s (NYSE:TMS) common stock has declined since our 3Q 08 update report, dated 17 October 2008, due to investor concerns over an anticipated recession in the US and its repercussions on the other economies. However, we believe the company’s signature deals, continuous introduction of new products and ongoing cost reduction initiatives should favourably impact the company’s financial performance, going forward. Moreover, we believe the significant decline has left the company’s common stock significantly undervalued at current price levels and, therefore, we maintain our BUY rating for the common stock on fundamental grounds. We maintain our current HOLD rating for the ADR based on our weak fundamental outlook, coupled with our anticipation of a negative currency impact over our investment horizon. Going forward, we are likely to revert to a 6-12 month investment horizon as we now expect a significant negative currency impact on the ADR over the near term.

Due to significant volatility in global markets, the Herbalife Ltd. (NYSE:HLF) NYSE common stock appreciated significantly on 28 October 2008. As the stock price has declined significantly since our last update report, at current price levels the target price supports a BUY rating. However, we maintain our HOLD rating for the NYSE common stock due to the dismal market conditions and as we expect household incomes to contract negatively impacting, revenue growth over our investment horizon. The current target price supports a BUY rating at current price levels and we now expect a significant positive currency impact2, hence we maintain our BUY rating for the European common stock over the medium term. We are also likely to revert to an investment horizon of 6-12 months in our next update report as we now expect a significant currency impact over the medium term.

Lihir Gold Limited (NASDAQ:LIHR) announced a healthy set of 3Q 08 production data on 28 October 2008. Production at Lihir Island improved mainly due to higher grades recovered. Considering additional gold volumes contributed by Mt. Rawdon along with the successful ramp-up of the Ballarat project, we remain optimistic about the company’s growth prospects. Therefore, we view the recent decline in the stock price as a buying opportunity, and upgrade the ADR to from a HOLD to a BUY. We now anticipate a significant positive currency impact on the Australian stock over our investment horizon. Therefore, we upgrade the Australian stock from a HOLD to a BUY.

China Eastern Airlines Corporation Ltd. (NYSE:CEA) reported a record loss during 3Q 08, reflecting stricter travel regulations during the Beijing Olympics and fluctuating crude oil prices. Furthermore, the ongoing global financial crisis is expected to subdue China’s air travel market, going forward. Although the common stock target price supports a BUY at current levels, we maintain our SELL rating as we remain sceptical given our weak fundamental outlook. We maintain our SELL rating although current levels support a BUY, given our weak fundamental outlook. The Hong Kong dollar is pegged to the US dollar.

Copa Holdings S.A.’s (NYSE:CPA) NYSE common stock recorded an overnight appreciation of 24.4% reflecting a decline in crude oil prices coupled with a single day appreciation of 10.33% in the NYSE index on the same day. Given current price levels and our fundamental outlook for the company, we reiterate the NYSE common stock a BUY. As we expect significant positive currency impact in the long term and coupled with our fundamental outlook, we do not anticipate a change in our current European Stock rating. We expect to revert to a 6-12 month investment horizon in our next update report as we anticipate a significant currency impact on the ADR in the short to medium term.

On 28 October 2008, Aegon N.V. (NYSE:AEG) reported preliminary financial results for 3Q 08. Management expects to report a net loss of approximately €350 mn in 3Q 08 due to the underperformance of fair value investments and impairment charges. The company also announced that it has secured additional capital of €3 bn from the Dutch government. On the same day, while Fitch affirmed its ratings on Aegon, it revised its outlook to negative. The common stock price declined 13.9% on 28 October 2008. We continue to hold a cautious outlook for the company and maintain our current HOLD rating for the common stock although the current price implies a BUY rating. Although the current target price supports a BUY rating, we maintain our current HOLD rating for the ADR based on our weak fundamental outlook and an anticipated negative currency impact over our investment horizon. Going forward, we are likely to introduce a 6-12 month horizon to value this stock as we now expect a significant negative currency impact on the ADR over the near term.

InterContinental Hotels Group PLC’s (NYSE:IHG) ADR has declined significantly since our rating downgrade of 10 October 2008, reflecting the ongoing turmoil in global equity markets and depressed outlook for travel and tourism. Even though our target price supports a BUY rating at current price levels, we continue to maintain our cautious outlook for the company and maintain our HOLD rating. We upgrade the UK stock from a HOLD to a BUY as we now expect a significant positive currency impact on the UK stock over the coming 6-12 months. Therefore, we expect to introduce a 6-12 month horizon to value this stock in our next full update report.

Vivo Participações S.A.’s (NYSE:VIV) preferred stock has experienced a significant decline since our last update report, reflecting weakness in equity indices and prevailing concerns of a global economic slowdown. However, given the company’s strong presence in Brazil’s telecom market, we remain optimistic regarding its growth prospects. In view of this we believe that this decline has left the company significantly undervalued and therefore maintain our current BUY rating for the preferred stock on fundamental grounds. Although we anticipate a negative currency impact on the ADR over the next 6-12 months, we expect this to be offset by our fundamental outlook. Hence, we maintain our BUY rating on the ADR.

BG Group PLC (OTC:BRGYY) announced on 28 October 2008 that it has launched a takeover bid to acquire Queensland Gas Company Limited (QGC) of Australia which is expected to strengthen its presence in the Asia Pacific region. We believe that the recent crisis in global equity markets has rendered the stock undervalued at current price levels, and given that we believe the company remains fundamentally strong and that the potential acquisition of QGC is expected to support BG’s future financial performance we maintain our BUY rating for BG’s common stock. Although the currency impact1 on the ADR is expected to be negative over the medium term, given our fundamental outlook and current price levels, we reiterate the ADR a BUY.

China Digital TV Holding Co. Ltd.’s (NYSE:STV) ADR has declined significantly since our 2Q 08 update report led by the worsening state of equity markets worldwide on account of a challenging global economic environment and the financial markets crisis. However, we believe that this decline has left the company significantly undervalued and therefore maintain our current BUY rating for the ADR based on the company’s leading position in the Chinese Conditional Access systems market. We are likely to change to a 6-12 month horizon to value the company in our next update report as we now anticipate a significant positive currency impact on the European stock over the next 6-12 months2. Hence we do not anticipate a change in our current rating for the European stock.

We believe the recent decline in China Telecom Corporation Ltd’s (NYSE:CHA) common stock is due to general weakness in global equity markets and a slowdown in the US economy. Going forward, we expect revenues to grow over the next two years, due to an anticipated increase in non-voice revenues. In light of these factors and given current price levels we do not anticipate a change in our current rating. As the target price supports a BUY rating at current levels, we reiterate the ADR a BUY. The Hong Kong dollar is pegged to the US dollar.

TIM Participações S.A.’s (NYSE:TSU) preferred stock has experienced a significant decline since our last update report, reflecting weakness in equity indices and prevailing concerns of a global economic slowdown. However, due to significant volatility in global markets, the preferred stock appreciated by 25% on 28 October 2008.,Given the company’s strong presence in Brazil’s telecom market, we remain optimistic regarding its growth prospects. In view of this we believe the company remains significantly undervalued and therefore maintain our current BUY rating for the preferred stock on fundamental grounds. Although we anticipate a negative currency impact on the ADR over the next 6-12 months1, we expect this to be offset by our fundamental outlook and current levels suggest an investment opportunity. Hence, we maintain our BUY rating on the ADR.

CNH Global N.V.’s (NYSE:CNH) stock appreciated 21.4% on 28 October 2008 reflecting healthy 3Q 08 results, a positive FY 2008 outlook as well as a 10.33% increase in the benchmark NYSE index on the same day. Given our fundamental outlook, we do not anticipate a change in our current rating for NYSE common stock until we fully reassess the company in our next update report. Given that our fundamental outlook is positive and as we continue to anticipate a significant positive currency impact on the European stock over our investment horizon, we do not anticipate a change in our current European stock rating.

Focus Media Holding Limited (NASDAQ:FMCN) ADR has experienced a significant decline since our last update report, led by the worsening state of equity markets worldwide on account of a challenging global economic environment and the financial markets crisis. Hence, although at current levels our target price supports a BUY rating, we are moderating it to a HOLD until we reassess the stock in the coming weeks. We are likely to change to a 6-12 month horizon to value the company in our next update report as we now anticipate a significant positive currency impact on the European stock over the next 6-12 months horizon2. However, as we are moderating our ADR rating to a HOLD on account of economic concerns and its impact on FMCN’s business, we are also moderating the European stock rating from a BUY to a HOLD.

The Gafisa S.A. (NYSE:GFA) common stock price increased significantly on 29 October 2008, reflecting volatility in global markets. Despite the current worries over the global real estate sector, we remain positive about the company’s long term growth potential as the government continues to look at alleviating the housing deficit in Brazil. We believe the company is undervalued at current levels and, hence, maintain our current BUY rating for the Gafisa common stock. Although we now anticipate a significant negative currency impact1, on the ADR in the medium term, we maintain our BUY rating for the ADR in line with our fundamental outlook and as the target price supports a BUY rating at current price levels.

We believe the recent decline in KT Corporation’s (NYSE:KTC) common stock is due to general weakness in global equity markets and a slowdown in US economy. Going forward, we expect EBITDA margin to decline due to an increase in cost of services provided and cost of goods sold expenses, as a percentage of revenues. Furthermore, we expect operating margin to decline due to an anticipated increase in overall operating expenses. Thus, although the target price supports a BUY rating at current levels, in light of these factors and weak market sentiment we reiterate our HOLD rating for the common stock. We downgrade the ADR from a BUY to a HOLD as we anticipate a significant negative currency impact on the ADR over the next 6-12 months.

We believe the appreciation in Millicom International Cellular S.A.’s (NASDAQ:MICC) common stock is due to broad market movements. In addition, in 3Q 08 MICC posted impressive revenue growth, fuelled by strong performance from operations in Asia, South America and Africa. Furthermore, going forward we expect overall revenues to register strong growth driven by robust growth in revenues from Central America, South America, Asia and Africa. Thus, in light of these factors we do not anticipate a change in our current rating. We upgrade the SDR to a BUY from a HOLD as we expect a significant positive currency impact on the SDR over the long term. We are likely to revert to a 6-241 month investment horizon for this company as we no longer anticipate a significant currency impact in the short term.

Mobile TeleSystems OJSC (NYSE:MBT) ADR increased significantly on 28 October 2008 reflecting the persistent volatility in the global markets. Going forward, we expect robust growth in Russian Average Revenues Per User (ARPU) to drive top–line growth. In light of strong fundamentals we believe the ADR represents an attractive opportunity at current levels. As a result, we reiterate our BUY rating for the ADR. We continue to anticipate a positive currency impact on the Russian stock over our 6-12 months1 investment horizon. Therefore, we maintain our BUY rating.

We believe the recent depreciation in the Philippine Long Distance Telephone Company’s (NYSE:PHI) common stock is due to recent volatility in the global financial markets following the liquidity crunch in US and European markets. Going forward, we expect subscribers-base growth to decline as the Wireless market is attaining maturity, coupled with rising competition. Hence, although the target price supports a BUY rating at current levels, in the light of the above factors, we reiterate our HOLD rating for the common stock. Although the target price supports a BUY rating at current levels, in light of weak fundamentals and negative currency impact, we maintain our SELL rating for the common stock.

Aluminum Corporation of China (NYSE:ACH) released its 3Q 08 trading update on 28 October 2008. Revenues and profitability declined y-o-y, due to falling metal prices and rising costs. Going forward, we expect cost pressures to persist, led by rising energy prices. Therefore, we are likely to lower our estimates and target price in our next update report. However, at current levels, we continue to see upside potential and maintain our BUY rating. The Hong Kong dollar is currently pegged to the US dollar. Therefore, no currency impact is expected on the ADR over our investment horizon. We maintain our BUY rating in line with our fundamental outlook.

On 27 October 2008, Banco Itau Holding Financeira S.A. (NYSE:ITU) reported preliminary results for 3Q 08, with full results to follow on 04 November 2008. The highlights of the announcement are outlined below. Although we remain concerned about the impact of financial market volatility, our fundamental outlook for Itau remains positive, based on the bank’s improving asset mix and operating efficiency. Therefore, we maintain our BUY rating for the preferred stock. We expect to revert to a 6-12 month investment horizon when we revalue the bank in our next full update report, as we now anticipate a significant negative currency impact on the ADR in the medium term1. Meanwhile, in view of our fundamental outlook, we maintain our HOLD rating.

Reflecting heightened volatility in global markets, the Companhia Siderurgica Nacional (NYSE:SID) common stock appreciated by 21.7% on 28 October 2008. Meanwhile, the Bovespa index rose by 13.4% on the same day. Given that we expect sustained demand for the company’s products from emerging markets, we continue to see healthy upside potential at current levels. Therefore, we maintain our BUY rating for the common stock. We continue to anticipate a significant negative currency impact on the ADR over our investment horizon. However, in line with our fundamental outlook, we maintain our BUY rating.

As discussed in our previous company news alert, dated 24 October 2008, the merger between Fording Canadian Coal Trust (NYSE:FDG) and Teck Cominco Ltd. (Teck Cominco) is set to be completed on 30 October 2008. As a result, 29 October 2008 will be the final day of trading for the common trust unit. We therefore terminate our coverage.

Although Guangshen Railway Co. Ltd.’s (NYSE:GSH) reported robust revenue growth in 3Q 08, profitability was impacted by increasing operating expenses. Given our fundamental outlook and given that the decline in common stock price has left the common stock significantly undervalued at current levels, we maintain our BUY rating for the Guangshen common stock. Given current price levels, we maintain our BUY rating for the ADR until we reassess the company in our next update report. The Hong Kong dollar is currently pegged to the US dollar.

On 28 October 2008, Mechel OAO (NYSE:MTL) announced that it has signed a Memorandum of Intent with one of China’s largest state-owned industrial companies, Minmetals Corporation (Minmetals). Furthermore, on 27 October 2008, Mechel announced the establishment of an East-European Steel Division. Following this news, the Mechel ADR price rose sharply on 28 October 2008. Nevertheless, we remain concerned about declining commodity prices, as well as political and economic conditions in Russia. Therefore, we maintain our HOLD rating for the ADR, even though our current target price supports a BUY. As the Russian stock trades in US dollars, we do not anticipate any currency impact over our investment horizon. Therefore, based on our fundamental outlook, we maintain our HOLD rating.

PT Telekomunikasi Indonesia Tbk.’s (NYSE:TLK) common stock has declined significantly since our last update report, due to volatility in the global financial markets and slowdown in the US economy. However, as we do not expect further downside from these levels based on our fundamental outlook, and given current price levels, we upgrade our common stock rating from a HOLD to a BUY. Although the target price supports a BUY rating at current levels, since we expect a significant negative currency impact on the ADR over the medium term1 we downgrade the ADR from a BUY to a HOLD.

Qimonda AG’s (NYSE:QI) ADR registered a decline of 50.0% in a single trading session on 28 October 2008, resulting in a 95.3% price decline since our previous update report. In addition to general market volatility, the price decline is attributable to ongoing weakness in the company’s business environment as well as investor concerns over the uncertainty related to Infineon Technology AG’s (Infineon) stake sale. Speculation over the company’s inability to fund its working capital requirements in the near term further aggravated the stock price decline. The company’s stock price is highly volatile and its financial soundness remains a significant concern. Consequently, we advise investors to avoid investing in the company, and maintain our HOLD rating for the stock. Although we now expect a significant positive currency impact on the European stock in the near term we maintain our current HOLD rating for the European stock based our fundamental outlook for the company.

Tokio Marine Holdings Inc.’s (OTC:TKOMY) common stock price has depreciated significantly since our previous update report reflecting the ongoing global financial crisis. Going forward, while the weak outlook for Japan’s economy is expected to limit the company’s growth rate, we believe the company’s inorganic expansion in overseas markets will support performance. Given the decline in the common stock price, we maintain our BUY rating, although we are likely to revise our estimates downwards once the company announces its 1H 09 results. We maintain our current BUY rating for the ADR at current price levels based on our fundamental outlook and as we continue to anticipate a significant positive currency impact over our investment horizon.

On 24 October 2008, Unibanco-Uniao de Bancos Brasileiros S.A. (NYSE:UBB) reported preliminary financial results for 3Q 08, highlighting growth of 5.6% y-o-y in net income. Although we remain concerned about the potential impact of financial market volatility, our fundamental outlook for Unibanco remains positive, based on its improved asset mix. Therefore, we maintain our BUY rating for the common stock. We now expect a significant negative currency impact on the GDR over our investment horizon1. Therefore, we downgrade the GDR from a BUY to a HOLD.

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